Clause 212

Legal Services Bill [Lords] – in a Public Bill Committee at 9:30 pm on 26th June 2007.

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Photo of Bridget Prentice Bridget Prentice Parliamentary Under-Secretary, Ministry of Justice

I beg to move amendment No. 28, in clause 212, page 120, line 5, leave out from ‘Chancellor’ to end of line 24.

This amendment reverses one that was made in the other place. The Lords amendment imposed two conditions on the commencement of part 5 of the Bill, which deals with ABS. The first condition was that more research needed to be conducted into the possible effects of ABS and then the results of that research would have to be considered by Parliament before part 5 could be commenced. The second condition was that, unlike the rest of the Bill, part 5 could only be commenced with the approval of both Houses under the affirmative resolution procedure.

Frankly, I cannot see that further research would add anything constructive to the Bill. Baroness Ashton took pains to explain in the other place that such research could achieve only two things: either it would compare our reforms with other jurisdictions, in which case we would learn very little that is relevant, or it would try to estimate the effects of the ABS in the absence of any firms actually being operational, in which case we would get a lot of theory but there would be little chance of  discovering anything based on hard evidence. Neither type of information would be much help to Parliament in approving a commencement order.

We have already commissioned research and used it to inform the Bill. Between the Clementi report and our White Paper, well-respected academics examined the benefits of multi-ownership models and law services’ multi-disciplinary practices, as well as the organisational structure of legal firms. They all concluded that the ABS proposals were sensible and did not present unacceptable risks.

If we do not deal with clause 212, there is also a risk of delay. It will be some time before part 5 is commenced, which will happen in 2010 or 2011. It may seem as if there is plenty of time to do research, but, of course, there could be other developments before then. Consequently, we would risk the results of such research becoming even less relevant. To defer the commencement of part 5 to take account of the most up-to-date developments would mean risking part 5 not being ready in time or having little relevance.

We do not want to delay the benefits that part 5 offers consumers. I believe that the timetable is sensible. It ensures that the board will begin approving licensing authorities only when it and the authorities are ready, which will necessarily take some time. There is no justification for delay beyond that time, other than the reasonable caution that I would expect licensing authorities to exercise when they start their work. There is even less justification for imposing a requirement to carry out further research when there is little point behind the research and little chance of producing anything useful beyond what we already know.

The other troublesome element in clause 212 is the requirement for an affirmative resolution for any commencement order, which is a kind of sunrise clause. I do not agree that that measure is necessary, and it was not proposed by the Delegated Powers Committee. Commencement orders are not normally subject to parliamentary procedure, particularly affirmative procedure, and I see no reason to change things here. If anything, this requirement for affirmative procedure is a crude, clumsy attempt to put obstacles in the way of part 5 and specifically to give a veto to those in the House of Lords who oppose the concept of ABS, but whose arguments have failed to win the debate on the principle. Taken with the requirement for more research, hon. Members could be forgiven for thinking that this was a wrecking amendment, or a wrecking clause.

Bearing all that in mind, I urge the Committee to support my amendment to remove that clause from the Bill.

Photo of Henry Bellingham Henry Bellingham Shadow Minister (Justice)

I have listened to what the Minister has said and I can tell her that, although we are not particularly happy with the Government amendment, which will overturn what was inserted in the House of Lords, we will not vote against it, as she has made some good points. We are very disappointed indeed that the Government have decided to overturn a number of other Lords amendments, but we have had those debates already. I think that the Government have been curmudgeonly and ungenerous, but on this occasion the debate has rolled on and some greater understanding and realisation have been achieved. That particular  Lords amendment was not completely spot on, which it should have been, so we will not force a vote.

Photo of Simon Hughes Simon Hughes Shadow Attorney General, Party Chair, Liberal Democrats

This is the last controversial amendment. I am willing to do the Government a deal, but I do not think that the Minister will buy it: the terms are that she withdraws the amendment and we give her no trouble on the remaining two Government amendments to be debated before our consideration of the Bill is completed. I merely give her a chance to reflect, but it does not look like she is likely to buy it.

The second thing to say before dealing with the substance of the matter is that there are two pressures on those of us who are considering what to do on this amendment: pressure from the Minister and her desire to move on to introduce alternative business structures, and pressure from my colleagues and independents in the other place, who voted to secure a majority of 68 for the amendment, which she is seeking to undo. I would rather face the wrath of the Minister on a temporary basis than that of all 78 colleagues, which is how many there were before the Government started making overtures to them earlier in the week.

On the substance of my main point, like the hon. Member for North-West Norfolk, I reflected seriously on the matter. I did not say, “We must absolutely hold the line just because that was the view that my colleagues took in the other place.” I reflected on whether we should change our position. On balance, I decided that we should not do so, that we should support the Bill as it is and that we should oppose the Government amendment. There are three reasons for that.

First, there is still huge concern among many interested people about the introduction of ABS, and an independent report at this stage—after all the debate on the Bill—would produce a new ability to assess the benefits and disbenefits. Yes, such a report might draw on other jurisdictions and other assessments, and it would not be based on practice, but given that there is nothing else that one can use for assessment, one has to use the best evidence available, which would be up to date.

Secondly, we must address the access to justice concerns, which we have already discussed. Thirdly, there must be the ability to have a sunrise clause. As the Minister knows, other Bills have included sunrise clauses. A sunrise clause would mean that there would have to be parliamentary agreement to press the button on the new business structures, which is, on balance, the right side of the line.

The debate has moved on, as the hon. Member for North-West Norfolk has said, but I am still persuaded that there are sufficient concerns for us to believe that the House of Lords was right on this issue, that we need to proceed with caution, and that that reflects the view reached by the Joint Committee and during earlier consideration. The Government are pushing too hard and too fast in that direction.

In any event, if the Government’s proposals are winning arguments and can win people around to their way of thought, they will also win the vote. I hope, for the time being, that colleagues will accept that it is better to proceed carefully and cautiously, and that this  is such an approach to what could be a harmful, as well as potentially beneficial, option.

Photo of Bridget Prentice Bridget Prentice Parliamentary Under-Secretary, Ministry of Justice

I am grateful to the hon. Gentleman for the way in which he has put his concerns. Sir David Clementi was on a number of occasions, not least quite recently in a meeting organised by the Bar Council, very supportive of our ABS proposals, in which I believe absolutely. I do not think that ABS will happen overnight anyway, which is why I do not think that the amendment needs to stand, even if I agreed with it in the first place. It is much more likely that local development plans will be up and running before multidisciplinary practices come into being. As the hon. Gentleman knows, we are looking at one aspect of that to see whether other areas can be accommodated.

I believe that the motive in the other place was to scupper this part of the Bill. Despite what hon. Members have said, nothing that I have heard has dissuaded me from that view. I believe that a cautious approach will be taken when the board, the regulators and the licensing authorities begin, and that the world will not turn into an ABS overnight. It is still a little way off, so we have time to ensure that we get the right rules and regulations in place for the licensing authorities to do their work properly. The Consumer Panel is of the view that the Lords amendment was a wrecking amendment, and all consumer groups are keen to for us to go ahead with the Bill as originally drafted.

Photo of Simon Hughes Simon Hughes Shadow Attorney General, Party Chair, Liberal Democrats 9:45 pm, 26th June 2007

A range of views was expressed in the other place, as elsewhere. Some people are implacably opposed to part 5 of the Bill and have heard nothing to change their minds, but others take a more cautious and incremental view. I share the Minister’s opinion that some hold that view, but I thought it better to hold on to my position because it accommodates a broader range of opinion than proceeding in the way suggested by the Minister.

Photo of Bridget Prentice Bridget Prentice Parliamentary Under-Secretary, Ministry of Justice

I understand what the hon. Gentleman says, but it is important that we move on. We are trying in part 5 to give the opportunity for ABS to happen within the framework that I have described. Certainly, there will be caution at the beginning in order to ensure that everyone is satisfied and that the new system works properly. Those not motivated by principled objections who want to ensure that we get it right should be reassured that everything else that builds into part 5 will ensure that a proper approach is taken.

Question put, That the amendment be made:—

The Committee divided: Ayes 9, Noes 2.

Division number 28 Nimrod Review — Statement — Clause 212

Aye: 9 MPs

No: 2 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

Question accordingly agreed to.

Clause 212, as amended, ordered to stand part of the Bill.

Clauses 213 and 214 ordered to stand part of the Bill.